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CDI Fact Sheet: Anti-Terrorist Finance Measures
The following is a list of U.S. and international legislation and groups involved in countering the financing of terrorist organizations.
The executive order calls for the compilation and maintenance of a list of all those “associated with” designated terrorist groups. This expands upon previous executive orders to include those involved in any acts of global terrorism, not just those committed in the Middle East or by the Taliban. The order explicitly targets those involved in any aspect of terrorist financing, including fundraisers, donors, transfer agents, charitable organizations and banks. The people or entities placed on the list are labeled Specially Designated Global Terrorists (SDGTs). The Treasury Department has the authority, under the executive order, to freeze all U.S. assets and to block any U.S. transactions of the SDGTs. Treasury also has the power to block foreign banks and other financial institutions from access to U.S. markets and assets if they refuse to freeze the holdings of these specified terrorists. For a complete and updated list of SDGTs, click here.
Operation Green Quest is an inter-agency task force made up of the best financial investigators from the U.S. Customs Service, the IRS, the FBI, and the Secret Service. The group focuses domestically on underground financial systems, illicit charities, and corrupt financial institutions that may be sources of terrorist funding. In addition, Operation Green Quest investigators also attempt to root out potential future funding sources that have yet to be exploited by terrorists.
Under the act, private financial institutions are asked to enhance transaction transparency, to search for a common customer identification system, and to find ways to prevent their financial services from being used for money laundering or the funding of terrorism. In addition to promoting greater cooperation between the government and the private sector, the USA PATRIOT Act also facilitates information sharing between governmental agencies.
These resolutions require all UN member states to “Freeze without delay the funds and other financial assets or economic resources” of those individuals and entities designated by the United Nations as belonging to, or associated with, the Taliban or al Qaeda. Under UNSCR 1390, governments of member states may block those on the UN terrorist list from using their territories as a base of operations or point of transit. The resolution also provides the grounds for making it illegal to deal arms and give training or other assistance to UN-named terrorists. For an updated UN list click here.
The Financial Action Task Force is a 31-nation intergovernmental organization that was originally created to fight money laundering and which now also focuses on terrorist financing. On Oct. 31, 2001, the FATF issued eight special recommendations directed to help nations curb terrorist financing. The recommendations ask member nations - as well as non-member nations seeking to avoid international scrutiny - to take a wide range of measures spanning from making the funding of terrorism a criminal act to regulating informal remittance systems to providing the greatest possible support to other countries’ terrorist finance investigations. In helping nations achieve these goals, the FATF often collaborates with several other regional international organizations, including the Council of Europe, Caribbean Financial Action Task Force, and the Asia Pacific Economic Cooperation.
Both the International Monetary Fund (IMF) and the World Bank have adopted action plans to work together on anti-money laundering and the combat against the financing of terrorism (AML/CTF). The plans basically call for both institutions to shape their current anti-money laundering strategies around efforts at stopping terrorism financing. The IMF and World Bank are also studying informal fund transfer systems (hawalas) and they are providing technical assistance to weaker states in an effort to bring them up to international AML/CTF standards.
Founded in 1975, the G7, or group of seven, is made up of the world's seven richest industrial countries, including the United States, Japan, Germany, France, Britain, Italy, and Canada, who meet regularly to discuss problems with the world economy. G20, which was created by the group of seven in 1999, is composed of 19 countries, the European Union and the Bretton Woods Institutions (the IMF and the World Bank). Its mission is to foster international financial stability. On Oct. 6, 2001, G7 Finance Ministers and Central Bank Governors issued an Action Plan to Combat the Financing of Terrorism. This was followed by a similar action plan signed by G20 officials on Nov. 17, 2001. Under the plans G7 and G20 countries agreed to uphold UN measures aimed at combating terrorist financing, to create financial intelligence units (FIUs), increase information sharing, and to provide technical assistance to weaker states.
An informal organization made up of the financial intelligence units (FIUs) of 69 countries, the Egmont Group is dedicated to the promotion and strengthening of FIUs around the world through greater information sharing and training. Since Sept. 11, 2001, the group has been especially determined to help foster the development of FIUs in nations that have inadequate resources to monitor money laundering and other suspicious financial transactions.
Contributions by the Department of the Treasury to the Financial War on Terrorism Fact Sheet , United States Treasury Department, September 2002. Jonathan M. Winer and Trifin J. Roule, “Fighting Terrorist Finance,” Survival, vol. 44, no.3, Autumn 2002, pp. 87-104, The International Institute for Strategic Studies.
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